But what are Britain’s banks to do for Britain

Sir Martin Wolf “What to do with Britain’s banks”, December 12, is evidence that the most immediate task at hands for the regulators who “represent the interest of these risk-bearers of last resort” should be to start giving thoughts on what Britain’s banks should do for Britain.

Ironically the current bank regulations fabricated by the Basel Committee had the sole purpose of avoiding bank failures, and which is why the regulators imposed minimum capital requirements based on vaguely defined risks of default and empowered the credit rating agencies to measure these risks, and we see were all that nonsense got us. The worst part of this financial nightmare turned reality is that most countries have so little to show for it.

An explosion of public and consumer debt, as if we all had placed a reverse mortgage on the world, is nothing to write home about. Our worst risk now is that the regulators in Basel and many influential opinion makers with them are incapable of understanding that the purpose of our banks is really not to avoid risks but to take the right risks on behalf of society since those are the only risks taxpayers could be asked to pay for.